Ekati reaches production milestone

Production from the Ekati diamond mine in the Northwest Territories has surpassed 1 million carats.

Also, in March, the mine produced 236,598 carats — not far off the monthly target of 250,000 carats.

BHP Diamonds, a subsidiary of Broken Hill Proprietary (BHP-N), is the operator and owns 51% of the mine, whereas Dia Met Minerals (DMM-T) owns 29%. The remaining 20% interest is split equally between geologists Charles Fipke and Stewart Blusson.

Some 526,000 carats have now been sold in four lots for a total of $76 million. This is equivalent to an average value of US$144 per carat — higher than the US$130-per-carat bulk-sample valuation on the Panda kimberlite pipe, which is currently being mined. BHP says average carat values have increased with each of the four sales.

There is a time lag of about two months between mine production and sales because all stones must be valued, shipped and sorted prior to being sold.

James Rothwell, president of BHP Diamonds, states: “In addition to the solid level of production achieved within six months of the mine opening, we are particularly pleased with the positive response for the diamond market. There is clearly a strong interest in a steady, long-term supply of quality rough diamonds from a reliable producer.”

Through a sales office in Antwerp, Belgium, BHP is selling the Ekati diamonds to clients on a regular 5-week cycle. Sales of smaller parcels for marketing test purposes are ongoing. De Beers Consolidated Mine (DBRS-Q) has an agreement-in-principle with BHP to buy 35% of the run-of-mine production from Ekati. The 3-year deal will come into effect once a definitive contract is signed.